Moody’s Corp. (MCO) Updates FY16 Outlook; Notes FX Gain

September 28, 2016 7:01 AM EDT

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Moody’s Corporation (NYSE: MCO) updated its guidance for the full year ending December 31, 2016.

Full year 2016 GAAP EPS is currently expected to be $4.70 to $4.80, which now includes an anticipated non-cash foreign exchange gain of approximately $0.18 related to a subsidiary reorganization, offset in part by an approximate $0.04 restructuring charge associated with cost management initiatives. Excluding these items, the Company expects full year 2016 non-GAAP EPS of $4.55 to $4.65. The Company expects to record the foreign exchange gain in its fourth quarter results and the restructuring charge in its third quarter results.

*** The Street sees FY16 EPS of $4.58.

“Increased issuance activity combined with a greater impact from our cost savings initiatives has resulted in a modestly improved outlook,” said Raymond McDaniel, President and Chief Executive Officer of Moody’s. “Excluding the impact of the specific items noted above, we expect 2016 EPS of $4.55 to $4.65.”

To reflect the Company’s current view of business conditions as well as the impact of the aforementioned foreign exchange gain and restructuring charge, the Company is updating certain components of Moody’s 2016 revenue and expense guidance.

Full year global MIS revenue is still expected to decrease in the low-single-digit-percent range, while US revenue is now expected to be approximately flat and public, project and infrastructure finance revenue is now expected to increase approximately 10%.

The effective tax rate is now expected to be 31% to 31.5%, including an approximate one percentage point favorable change due to the foreign exchange gain noted above which is not taxable.

A full summary of Moody’s guidance as of September 28, 2016 is included in the table at the end of this press release. Moody’s outlook for 2016 is based on assumptions about many geopolitical conditions and macroeconomic and capital market factors, including interest rates, foreign currency exchange rates, corporate profitability and business investment spending, mergers and acquisitions, consumer borrowing and securitization, and the amount of debt issued. These assumptions are subject to uncertainty, and results for the year could differ materially from our current outlook. Our guidance assumes foreign currency translation at August 31, 2016 exchange rates. Specifically, our forecast reflects exchange rates for the British pound (£) of $1.31 to £1 and for the euro (€) of $1.11 to €1.

Moody’s will host its Investor Day conference today in New York City.

The event will start at 8:30 a.m. Eastern Time and is expected to conclude at 12:00 p.m. The event will feature presentations from Moody's management team and showcase important aspects of the business. A copy of the presentation will be posted on Moody’s Investor Relations website,, at the start of the event.

In-person attendance is by invitation only; however, the event will be webcast live and can be accessed on Moody’s Investor Relations website at The event will also be accessible through a live conference call. Individuals within the U.S. and Canada can access the call by dialing 1-855-309-1713 toll-free. Other callers should dial 804-419-7747. Please dial into the call by 8:20 a.m. Eastern Time. The participant access code for the call is 61523561.

A replay of the event will be available approximately one week following the event on Moody’s Investor Relations website,, until 11:59 p.m. Eastern Time, December 28, 2016.

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